Structure consistent with assumptions of classical model

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Reference no: EM13838242

Consider a country with an economic structure consistent with the assumptions of the classical model. Suppose that businesses in this nation suddenly anticipate higher future profitability from investments they undertake today. Explain whether or how this could affect the following:

a. The current equilibrium interest rate

b. Current equilibrium real GDP

c. Current equilibrium employment

d. Current equilibrium saving

e. Future equilibrium real GDP

Reference no: EM13838242

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